Traditional Capital Raising - Eastern Asia

The Eastern Asian country is expected to see the Total Capital Raised in the Traditional Capital Raising market market reach US$84.70bn in 2024.
Venture Capital is set to dominate the market with a projected market volume of US$74.43bn in 2024.
When compared globally, the United States is forecasted to generate the most Capital Raised at US$159.0bn in 2024.
In Eastern Asia, Japan's traditional capital raising market is witnessing a resurgence in initial public offerings by tech startups.

Definition:

The Traditional Capital Raising market relates to venture investment in startups and emerging companies that are not yet generating positive or significant revenue but have high growth potential. The capital is mostly raised from venture financial institutions, and minorly from banks.

Structure:

The market consists of two segments:
- The Venture Capital market refers to private equity funding that is offered to startups and emerging companies.
- The Venture Debt market refers to the combination between equity and debt financing, which is used to finance the early stage and growth stage capital-backed companies.
The market data comprises of the amount of capital raised, number of deals, and average deal size.

Additional information:

Although the Traditional Capital Raising market is highly competitive in investment opportunities due to the rapidly high growth rate of startups and emerging companies, it has become more popular for these businesses who cannot get traditional loans from banks, to develop and grow their businesses or projects.
Key players in this market are companies such as Sequoia Capital and Hercules Capital.

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Venture Capital
Venture Debt

Traditional bank loans
Digital capital raising

The Traditional Capital Raising market in Eastern Asia has been witnessing significant developments and trends in recent years.

Customer preferences: In this region, customers have shown a growing interest in traditional capital raising methods such as initial public offerings (IPOs), rights issues, and private placements. This preference can be attributed to the perception of these methods as reliable and established ways of raising capital. Additionally, investors in Eastern Asia tend to have a long-term investment horizon and are willing to invest in companies that demonstrate strong growth potential.

Trends in the market: One of the key trends in the Traditional Capital Raising market in Eastern Asia is the increasing number of IPOs. Many companies in the region are choosing to go public to raise funds for expansion and to enhance their brand image. This trend can be attributed to the strong economic growth in countries like China, Japan, and South Korea, which has created favorable market conditions for companies to tap into the capital markets. Another trend in the market is the rise of private placements as a capital raising method. Private placements allow companies to raise funds from a select group of investors without going through the lengthy and costly process of an IPO. This trend can be attributed to the increasing number of high-net-worth individuals and institutional investors in Eastern Asia who are seeking investment opportunities in promising companies.

Local special circumstances: Eastern Asia is home to several large economies, including China, Japan, and South Korea, which have their own unique market dynamics. China, for example, has a large population and a rapidly growing middle class, which has created a strong consumer market. This presents attractive opportunities for companies to raise capital and expand their operations. South Korea, on the other hand, has a well-developed capital market and a strong culture of entrepreneurship. This has led to a vibrant ecosystem for capital raising, with a significant number of companies going public and attracting both domestic and international investors.

Underlying macroeconomic factors: The Traditional Capital Raising market in Eastern Asia is driven by several underlying macroeconomic factors. One of the key factors is the region's strong economic growth, which has created a favorable environment for businesses to raise capital. Additionally, the region's large population and growing middle class have increased consumer demand, leading to a greater need for capital to support business expansion. Furthermore, the supportive regulatory environment in Eastern Asia has played a crucial role in the development of the Traditional Capital Raising market. Governments in the region have implemented policies and regulations to promote capital market development and attract both domestic and international investors. In conclusion, the Traditional Capital Raising market in Eastern Asia is witnessing significant developments and trends driven by customer preferences, local special circumstances, and underlying macroeconomic factors. The increasing number of IPOs and the rise of private placements reflect the strong economic growth, favorable market conditions, and supportive regulatory environment in the region. As Eastern Asia continues to experience economic growth and attract investment, the Traditional Capital Raising market is expected to further evolve and contribute to the region's overall economic development.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Venture capital is the term used to call the financial resources provided by investors to startup firms and small businesses that show potential for long-term growth. It has become a very important source of capital for entrepreneurs, who often have problems with financing their needs through risk-averse banks. Venture capital investments incorporate a high level of risk as only some of the VC-backed companies develop into successful and highly profitable businesses. In 2020, the leading venture capital backed company worldwide was the Manbang Group, which based in Nanjing, China.